Labor senator Sue Lines accuses Tony Abbott of using national security as a shield against budget mess

A Labor senator has accused Prime Minister Tony Abbott of "scaremongering" over national security and using the situation in Iraq as a "shield" to deflect from its budget mess and to improve his position in the polls.

West Australian Senator Sue Lines says the government's "Team Australia" rhetoric is "threatening" because it tells groups within the community they can are either "in or out".

The government has used question time this week to focus on the threat posed by home grown terrorists, activated by the establishment of a caliphate in Iraq, by the barbaric terrorist group Islamic State.

Ms Lines says the tactic shows the government is only interested in "scaremongering".

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"[The Prime Minister] is just using this as a shield to try and deflect from the awful mess they're in with their budget," she told Fairfax Media.

"This is just the government dead keen to get out there and try and improve its ratings with the Australian public," she said.

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Asked whether she was trying to politicise the national security debate, Senator Lines said, "I'm not politicising security; the Abbott government is doing that by its constant scaremongering".

Ms Lines said she believed the director-general of ASIO David Irvine had outlined only a "mild threat" and said some response was needed to curb the growth of Islamic State across Iraq but it needed to be formulated in a calm way.